Iran call leads to Lebanon ceasefire; oil slips, gold rises

An Iranian call led to an Israel-Lebanon ceasefire that took effect on June 4. Markets reacted quickly: WTI crude fell more than 3% to $92.87 a barrel, while spot gold rose over 1% to $4,475.

Traders reduced the premium for potential supply disruptions after the agreement cleared one of Tehran’s conditions and raised hopes for wider talks that could ease tensions in the Gulf. About 20% of global oil trade passes through the Strait of Hormuz.

The dollar weakened and U.S. Treasury yields eased, making gold cheaper for holders of other currencies and supporting bullion’s rise.

Market participants are watching whether the Lebanon deal leads to progress on broader U.S.-Iran negotiations. Investors have begun to reprice risk ahead of any formal agreement. Friday’s U.S. nonfarm payrolls report is expected to influence interest-rate expectations and demand forecasts.

International energy agencies have warned that global oil markets could remain undersupplied through the third quarter of 2026 even if active hostilities end, citing damaged infrastructure and the time required for major exporters to restore output. OPEC+ production decisions will affect how quickly supply can adjust.

Gold’s advance reflected lower immediate geopolitical risk and current monetary policy. The Federal Reserve has held its benchmark rate at 3.5%–3.75%, and markets assign roughly a 30% chance of another hike by December, a backdrop that supports demand for non-yielding assets. Cryptocurrency markets reacted less persistently: bitcoin rallied when the conflict intensified but later gave back earlier gains as the conflict premium faded.

The ceasefire meets one condition but does not settle wider regional disputes. Energy and metals markets will monitor diplomatic developments, OPEC+ output choices and incoming economic data before fully locking in the recent repricing.